DUNN, N.C., April 28, 2021 (GLOBE NEWSWIRE) -- Select Bancorp, Inc. (NASDAQ:SLCT) (the "Company"), the holding company for Select Bank & Trust Company, today reported net income for the quarter ended March 31, 2021 of $6.3 million with basic and diluted earnings per share of $0.36, compared to net income of $1.1 million with basic and diluted earnings per share of $0.06 for the comparative quarter ended March 31, 2020. The increase in net income in the first quarter of 2021 compared to 2020 was primarily attributable to an increase in earnings from the three additional western North Carolina branches that were acquired in April of 2020, an increase in non-interest income and a reduction in the provision for loan losses.

Total assets, deposits, and gross loans for the Company as of March 31, 2021 were $1.8 billion, $1.6 billion, and $1.3 billion, respectively, compared to total assets of $1.3 billion, total deposits of $982.7 million, and gross loans of $1.0 billion as of the same date in 2020.

Comments of the Chief Executive Officer and Other Matters

William Hedgepeth, President and Chief Executive Officer of the Company, stated, "We are very pleased with our first-quarter earnings. Our markets are rebounding even with the lingering effects of the COVID-19 pandemic. Many of the businesses in the communities we serve are growing and are posting stronger revenues and profits. These businesses have adapted their operations for things such as limited occupancy, having some employees working remotely, revising product and service offerings, changes in hours of operations and implementing other changes to ensure their success. We have assisted our customers in our markets with additional Paycheck Protection Program, or PPP loans, expedited loan renewals and quicker loan decisions. During the first quarter we had strong loan growth of $37.9 million, an increase in deposits of $96.8 million and we increased total assets by $102.3 million. Our mortgage and SBA departments had their strongest quarter yet increasing fee income by $192,000 over the first quarter of 2020. We are very pleased with the growth in our newer western North Carolina markets, and in Holly Springs (Raleigh area), Cornelius (Charlotte area) and Virginia Beach. We are expecting continued franchise growth related to those strategic initiatives. We have worked very hard on our net interest margin and are pleased to report it was 4.02% for the first quarter this year. It has been extremely difficult to maintain our margin at this level but I can assure you it is constantly at the forefront of our daily decisions."

Hedgepeth continued, "Our asset quality has remained very strong and has even improved when compared to the pre-pandemic first quarter of 2020 and the fourth quarter of 2020. Past dues, nonaccruals and foreclosed real estate were lower at March 31, 2021 when compared to either March 31, 2020 or December 31, 2020. Our staff has worked diligently with our customers to understand the issues and challenges they are facing. Our PPP loan portfolio was approximately $51.2 million at the end of March 2021 and is down approximately $4.3 million since year end. In Phase 1 we originated 1,249 PPP loans for $97.0 million. As of March 31, 2021, we had 1,067 PPP loans that were forgiven totaling $81.4 million. In Phase 3 we have originated $35.6 million as of March 31, 2021. At the height of the pandemic we granted 419 loan deferrals related to COVID-19 for $219.6 million. As of March 31, 2021, we had 18 loan deferrals related to COVID-19 totaling $16.8 million. Based on our asset quality numbers our allowance for loan loss was reduced slightly from year-end, but we believe it is sufficient to absorb any losses in the near future. The country is not out of the pandemic yet so we will continue to provide additional staff resources, together with an ‘all hands-on deck' philosophy to facilitate as many customer requests as possible. We will continue to work with our customers by assisting them with any stimulus programs in the future."

"We stated last year that all of us are dealing with unprecedented times, and it was paramount that we remain flexible and accommodate the needs of the communities in which we operate. All of our branch lobbies are now open for business transactions while keeping the health and safety of our customers and employees as our primary objective. As we continue to proceed through the recovery process of the pandemic, we will remain mindful of the changes in the operational activities our customers adopted to address the effects of social distancing measures, occupancy limitations and other challenges that influenced how they interacted with their customers. We believe crafting financial solutions which enable and enhance our customers' relationships with their customers further strengthens business partnerships during these times."

Other matters of interest to shareholders are:

The Company repurchased 286,799 shares of Company common stock during the first quarter of 2021 under the repurchase plan authorized by the Board of Directors. The Company may repurchase up to an additional 264,099 shares of its common stock under the repurchase plan.
Loan growth was over $37.9 million in the first quarter of 2021.

Net Interest Income and Net Interest Margin

Net interest income was $15.9 million and $11.5 million for the first quarter of 2021 and 2020, respectively. On a comparative quarter basis, the Company's total interest income was positively affected by increased loan balances due to branch acquisitions and organic growth. The increase in interest income was partially offset by a decreasing loan yield, an increase in securities balances at a lower yield, plus the reduction in other earning assets at a lower yield. Average total interest-earning assets were $1.6 billion and $1.1 billion in the first quarter of 2021 and 2020, respectively. The yield on those assets decreased 44 basis points, from 4.98% in the first quarter of 2020 to 4.54% for the same period in 2021. This was primarily due to lower rates on recently originated loans and a reduction of accretion from acquired loans on a comparative quarter basis.

The Company's average interest-bearing liabilities increased by $325.1 million, to $1.1 billion for the quarter ended March 31, 2021, from $788.4 million for the first quarter of 2020. Low-cost savings, NOW and money market deposits increased $397.6 million while the cost of transactional deposits increased from 0.43% to 0.52%, or 9 basis points year over year. The cost of total deposits decreased from 1.25% in the first quarter of 2020 to 0.72% in the first quarter of 2021 due to the decrease in the cost of time deposits. During the first quarter of 2021, the Company's net interest margin was 4.02% and net interest spread was 3.79%. In the first quarter of 2020, net interest margin was 4.03% and net interest spread was 3.59%.

Provision for Loan Losses and Asset Quality

During the first quarter of 2021, the Company recorded a recovery of provision for loan losses (of $777,000), based primarily on adjustments to qualitative allowance factors and improved economic performance metrics related to the economic impact of the COVID-19 pandemic. A discount of 0.10% that was applied to all loan pools for factors related to the economic impact of COVID-19 for the prior quarter was removed. This removal resulted from increased availability of COVID-19 vaccines, stimulus packages, and more relaxed restrictions on businesses. We granted payment extensions on approximately 18 commercial and consumer loans totaling $16.8 million related to the impact of COVID-19 for the quarter. On a comparative quarter basis, the Company recorded a provision for loan losses of $2.3 million for the first quarter of 2020, based primarily on adjustments to qualitative loan factors related to the pandemic trends in the loan portfolio present during that quarter. In the first quarter of 2021, the Company recorded net charge-offs of $144,000 compared to net charge-offs of $11,000 in the first quarter of 2020. These charge-offs resulted in a net charge-off rate of 0.04% of average loans for the current quarter, compared to a net charge-off rate of 0.00% in the first quarter of 2020.

Non-interest Income

Non-interest income for the quarter ended March 31, 2021 was $1.7 million, an increase of $238,000 from $1.4 million in the first quarter of 2020. Service charges on deposit accounts totaled $256,000 for the quarter ended March 31, 2021, compared to $338,000 for the first quarter in 2020, representing a $82,000 decrease on a comparative quarter basis. Other non-deposit fees and income increased $128,000 from the first quarter of 2020 to the first quarter of 2021. Fees of $288,000 from presold mortgages and $197,000 from SBA loans totaled $485,000 in the first quarter of 2021, which represented an increase of $192,000 from the $293,000 of fees in the first quarter of 2020. The Company did not sell any investment securities in the first quarter of 2021 or 2020.

Non-interest Expense

Non-interest expenses increased by $949,000 to $10.2 million for the quarter ended March 31, 2021, from $9.2 million for the same period in 2020. In general, most categories of non-interest expenses increased, primarily due to an increase in expenses related to our western North Carolina branches acquired in April 2020. The following are highlights of the significant categories of non-interest expenses during the first quarter of 2021 versus the same period in 2020:

Personnel expenses increased $500,000 to $6.1 million, due to additional branch personnel and cost-of-living increases.
Occupancy expenses increased $59,000, primarily due to additional branches, repairs and maintenance and increased rent expense due to normal rent escalation.
FDIC insurance premium expense increased $392,000 due to increased assets from acquisition and growth.
CDI expense decreased $28,000 due to amortization.
Professional fees increased by $90,000 to $462,000.
Other expenses increased by $112,000 due primarily to increased branches.

Income Taxes

The Company's effective tax rate was 22.6% and 20.2% for the quarters ended March 31, 2021 and 2020, respectively.

Balance Sheet

Total assets at March 31, 2021 were $1.8 billion, an increase of $568.8 million from a year earlier. Gross loans at March 31, 2021 were $1.3 billion, up $302.8 million or 29.1% from a year earlier, and total deposits were $1.6 billion, an increase of $600.0 million or 61.1% from a year earlier.

Retail deposits (excluding brokered deposits and internet time deposits) grew at a rate of 102.7% or $614.3 million as of March 31, 2021 compared to the same period in 2020. Wholesale deposits decreased from $19.5 million at March 31, 2020 to $3.2 million at March 31, 2021 as we continue emphasizing core deposit growth to replace wholesale deposits.

About Select Bank & Trust Company

Select Bank & Trust has 22 full-service offices in these North Carolina communities: Dunn, Burlington, Charlotte, Clinton, Cornelius (Charlotte area), Elizabeth City, Fayetteville, Franklin, Goldsboro, Greenville, Highlands, Holly Springs (Raleigh area), Leland, Lillington, Lumberton, Morehead City, Raleigh, Sylva and Wilmington, North Carolina; in the following South Carolina communities: Blacksburg and Rock Hill; and in Virginia Beach, Virginia. The Bank also has loan production offices in Wilson, Durham and Winston-Salem, North Carolina.

About Select Bancorp, Inc.

Select Bancorp, Inc. is a bank holding company headquartered in Dunn, North Carolina. The Company primarily conducts operations through its wholly owned subsidiary, Select Bank & Trust Company, a North Carolina-chartered commercial bank that provides a full suite of banking services through its offices in North Carolina, South Carolina, and Virginia. The Company's common stock is listed on the Nasdaq Global Market under the symbol "SLCT".

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release and the accompanying tables are identified as being "non-GAAP financial measures." In accordance with the rules of the Securities and Exchange Commission, or the SEC, we classify a financial measure as being a non-GAAP (generally accepted accounting principles) financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of operations, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar, or with names similar, to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders' equity less goodwill and core deposit intangibles; and (b) tangible book value per share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per share. A reconciliation of tangible book value per share to book value per share is included in the tables that accompany this release.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

Important Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, revenue, and expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to anticipated market share growth, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook" or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to: the ongoing COVID-19 pandemic and measures intended to prevent its spread, which include wide disruptions to business activity that may impact the financial strength of our borrowers; our ability to manage growth or achieve it at all; substantial changes in financial markets; our ability to obtain the synergies and expense efficiencies anticipated from our acquisition activity and branch divestures and consolidations; regulatory changes; impacts from the recent presidential election, change in congressional leadership, and change in executive branch leadership, including regulatory agendas that may impact the business climate in which we operate; changes in interest rates; loss of deposits and loan demand to other savings and financial institutions; adverse economic conditions that impact our borrowers' ability to pay their debts when due; and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company's SEC filings, including its periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

SELECT BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	(Unaudited)			(Audited)			(Unaudited)			(Unaudited)			(Unaudited)
				(Dollars in thousands)
ASSETS

Cash and due from banks	$	22,533		$	23,324		$	25,068		$	24,037		$	20,030
Interest-earning deposits in other banks		133,884			87,399			249,541			157,521			35,544
Certificates of deposit		250			-			-			-			-
Federal funds sold		4,966			5,364			8,046			9,726			11,673
Investment securities available for sale, at fair value		208,648			194,492			87,434			62,958			64,738
Loans held for sale		3,953			2,064			2,945			3,455			1,606
Loans		1,342,316			1,304,384			1,283,457			1,249,999			1,039,514
Allowance for loan losses		(13,187	)		(14,108	)		(13,561	)		(12,054	)		(10,586	)
NET LOANS		1,329,129			1,290,276			1,269,896			1,237,945			1,028,928

Accrued interest receivable		4,991			5,110			4,486			4,400			3,839
Stock in Federal Home Loan Bank of Atlanta, at cost		862			1,147			3,059			3,059			3,059
Other non-marketable securities		655			709			718			718			718
Foreclosed real estate		1,968			2,172			3,237			3,561			3,737
Premises and equipment, net		20,222			20,587			20,883			20,893			17,868
Right of use lease asset		8,358			8,558			8,756			8,953			8,414
Bank owned life insurance		30,586			30,432			30,271			30,110			29,950
Goodwill		42,907			42,907			41,914			41,914			24,579
Core deposit intangible ("CDI")		1,363			1,513			1,677			1,856			1,431
Other assets		17,054			13,991			14,015			7,854			7,380
TOTAL ASSETS	$	1,832,329		$	1,730,045		$	1,771,946		$	1,618,960		$	1,263,494

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	448,835		$	395,916		$	408,209		$	400,098		$	250,031
Savings		55,184			51,843			51,629			52,597			41,815
Money market and NOW		708,172			649,677			610,275			495,609			306,051
Time		370,446			388,381			402,667			390,449			384,754
TOTAL DEPOSITS		1,582,637			1,485,817			1,472,780			1,338,753			982,651

Short-term debt		-			-			20,000			20,000			20,000
Long-term debt		12,372			12,372			37,372			37,372			37,372
Lease Liability		8,766			8,930			9,089			9,243			8,669
Accrued interest payable		206			246			449			457			536
Accrued expenses and other liabilities		15,859			7,312			18,889			1,597			2,181
TOTAL LIABILITIES		1,619,840			1,514,677			1,558,579			1,407,422			1,051,409

Shareholders' Equity
Common stock		17,227			17,507			17,787			17,863			18,056
Additional paid-in-capital		132,400			135,058			137,130			137,559			138,788
Retained earnings		67,178			60,838			56,917			54,460			53,779
Common stock issued to deferred compensation trust		(2,449	)		(2,416	)		(2,352	)		(2,553	)		(2,791	)
Directors' Deferred Compensation Plan Rabbi Trust		2,449			2,416			2,352			2,553			2,791
Accumulated other comprehensive income (loss)		(4,316	)		1,965			1,533			1,656			1,462
TOTAL SHAREHOLDERS' EQUITY		212,489			215,368			213,367			211,538			212,085

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	1,832,329		$	1,730,045		$	1,771,946		$	1,618,960		$	1,263,494

SELECT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months Ended												For the Twelve Months Ended
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020			December 31, 2020*		December 31, 2019*
						(Dollars in thousands, except for share amounts)
INTEREST INCOME
Loans	$	17,035		$	17,901	$	15,404	$	14,086	$	13,589		$	60,980	$	54,605
Federal funds sold and interest-earning deposits in other banks		25			52		54		33		168			307		1,838
Investments		920			752		367		381		421			1,921		2,003
TOTAL INTEREST INCOME		17,980			18,705		15,825		14,500		14,178			63,208		58,446

INTEREST EXPENSE
Money market, NOW and savings deposits		924			1,041		891		648		348			2,928		1,616
Time deposits		1,038			1,269		1,415		1,576		1,931			6,191		8,061
Short-term debt		16			131		145		141		87			504		62
Long-term debt		71			240		263		281		352			1,136		1,817
TOTAL INTEREST EXPENSE		2,049			2,681		2,714		2,646		2,718			10,759		11,556

NET INTEREST INCOME		15,931			16,024		13,111		11,854		11,460			52,449		46,890

PROVISION FOR (RECOVERY OF) LOAN LOSSES		(777	)		400		1,638		1,933		2,273			6,244		438

NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES		16,708			15,624		11,473		9,921		9,187			46,205		46,452

NON-INTEREST INCOME
Fees on the sale of mortgages		485			248		517		355		293			1,413		753
Gain on securities		-			-		-		-		-			-		48
Service charges on deposit accounts		256			291		257		206		338			1,092		1,161
Other fees and income		941			1,002		950		850		813			3,615		3,457
TOTAL NON-INTEREST INCOME		1,682			1,541		1,724		1,411		1,444			6,120		5,419

NON-INTEREST EXPENSE
Personnel		6,132			5,977		5,742		5,786		5,632			23,137		20,278
Occupancy and equipment		990			986		1,008		986		931			3,911		3,695
Deposit insurance		380			374		370		76		(12	)		808		184
Professional Fees		462			430		399		451		372			1,652		1,886
CDI amortization		151			164		179		195		179			717		825
Merger/acquisition related expenses		-			-		7		709		39			755		406
Information systems		1,046			1,049		1,043		972		1,038			4,102		3,492
Foreclosed-related expenses		(140	)		342		228		187		5			762		140
Debt extinguishment		-			1,616		-		-		-			1,616		-
Other		1,175			1,193		1,091		1,140		1,063			4,487		4,234
TOTAL NON-INTEREST EXPENSE		10,196			12,131		10,067		10,502		9,247			41,947		35,140

INCOME BEFORE INCOME TAXES		8,194			5,034		3,130		830		1,384			10,378		16,731

INCOME TAXES		1,854			1,113		673		149		280			2,215		3,696
NET INCOME	$	6,340		$	3,921	$	2,457	$	681	$	1,104		$	8,163	$	13,035
NET INCOME PER COMMON SHARE OUTSTANDING
Basic	$	0.36		$	0.22	$	0.14	$	0.04	$	0.06		$	0.46	$	0.69
Diluted	$	0.36		$	0.22	$	0.14	$	0.04	$	0.06		$	0.45	$	0.68

WEIGHTED AVERAGE COMMON
Basic Outstanding Shares		17,386,715			17,637,540		17,847,913		18,013,863		18,255,351			17,937,596		19,016,808
Diluted Outstanding Shares		17,415,680			17,661,922		17,866,822		18,030,136		18,287,064			17,961,258		19,063,237
* Audited

Select Bancorp, Inc.
Asset quality

	For Periods Ended
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2020			December 31, 2019
	(Dollars in thousands, except for share amounts, unaudited)
Non-accrual loans	$	6,095		$	6,790		$	7,695		$	7,979		$	7,201		$	6,790		$	5,941
Accruing TDRs		7,072			7,506			6,044			6,420			5,619			7,506			6,207
Total non-performing loans		13,167			14,296			13,739			14,399			12,820			14,296			12,148
Foreclosed real estate		1,968			2,172			3,237			3,561			3,737			2,172			3,533
Total non-performing assets	$	15,135		$	16,468		$	16,976		$	17,960		$	16,557		$	16,468		$	15,681

Accruing loans past due 90 days or more	$	1,673		$	802		$	1,548		$	1,326		$	1,182		$	802		$	1,231
Allowance for loan losses	$	13,187		$	14,108		$	13,561		$	12,054		$	10,586		$	14,108		$	8,324

Allowance for loans to period end loans		0.98	%		1.08	%		1.06	%		0.96	%		1.02	%		1.08	%		0.81	%
Non-performing loans & accruing loans past due 90 days or more to period ending loans		1.11	%		1.16	%		1.19	%		1.26	%		1.35	%		1.16	%		1.30	%
Non-performing loans to period ending loans		0.98	%		1.10	%		1.07	%		1.15	%		1.23	%		1.10	%		1.18	%
Allowance for loans to non-performing loans		100	%		99	%		99	%		84	%		83	%		99	%		69	%
Allowance for loans to non-performing Assets		87	%		86	%		80	%		67	%		64	%		86	%		53	%
Allowance for loans to non-performing Assets and accruing loans past due 90 days or more		78	%		82	%		73	%		63	%		60	%		82	%		49	%
Non-performing assets to total assets		0.83	%		0.95	%		0.96	%		1.11	%		1.31	%		0.95	%		1.23	%
Non-performing assets to accruing loans past due 90 days or more to total assets		0.92	%		1.00	%		1.05	%		1.19	%		1.40	%		1.00	%		1.33	%


SELECT BANCORP, INC.
Reconciliation of GAAP to Non-GAAP Measures
($ in thousands, except per share data, unaudited)

	For the Three Months Ended															For the Twelve Months Ended
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2020			December 31, 2019
Net interest margin:
Net Interest Margin-tax equivalent ⁽¹⁾	$	16,014		$	16,075		$	13,141		$	11,883		$	11,489		$	52,588		$	47,037
Purchased loan accretion and early payoff charges		(379	)		(506	)		(455	)		(620	)		(105	)		(1,581	)		(904	)
Net Interest Margin⁽²⁾ (Non-GAAP)	$	15,635		$	15,569		$	12,686		$	11,263		$	11,384		$	51,007		$	46,133

Loans receivable interest income:
Loans receivable interest income	$	17,035		$	17,913		$	15,415		$	14,097		$	13,600		$	61,025		$	54,645
Purchased loan accretion and early payoff charges		(379	)		(506	)		(455	)		(620	)		(105	)		(1,581	)		(904	)
Loans receivable interest income (Non-GAAP)	$	16,656		$	17,407		$	14,960		$	13,477		$	13,495		$	59,444		$	53,741

Acquired and non-acquired loans:
Acquired loans receivable	$	163,428		$	180,152		$	199,794		$	213,466		$	122,363		$	180,152		$	129,595
Non-acquired loans receivable		1,178,888			1,124,232			1,083,663			1,036,533			917,151			1,124,232			900,380
Total gross loans receivable	$	1,342,316		$	1,304,384		$	1,283,457		$	1,249,999		$	1,039,514		$	1,304,384		$	1,029,975
% Acquired		12.2	%		13.8	%		15.6	%		17.1	%		11.8	%		13.8	%		12.6	%

Non-acquired loans	$	1,178,888		$	1,124,232		$	1,083,663		$	1,036,533		$	917,151		$	1,124,232		$	900,380
Allowance for loan losses		13,187			14,108			13,561			12,054			10,586			14,108			8,324
Allowance for loan losses to non-acquired loans (Non-GAAP)		1.12	%		1.25	%		1.25	%		1.16	%		1.15	%		1.25	%		0.92	%

Total gross loan receivable	$	1,342,316		$	1,304,384		$	1,283,457		$	1,249,999		$	1,039,514		$	1,304,384		$	1,029,975
Allowance for loan losses		13,187			14,108			13,561			12,054			10,586			14,108			8,324
Allowance for loan losses to total gross loans receivable		0.98	%		1.08	%		1.06	%		0.96	%		1.02	%		1.08	%		0.81	%



	For Periods Ended
	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2020			December 31, 2019
Tangible common equity
Total shareholders' equity	$	212,489		$	215,368		$	213,367		$	211,538		$	212,085		$	215,368		$	212,775
Adjustment:
Goodwill		42,907			42,907			41,914			41,914			24,579			42,907			24,579
Core deposit intangibles		1,363			1,513			1,677			1,856			1,431			1,513			1,610
Tangible common equity	$	168,219		$	170,948		$	169,776		$	167,768		$	186,075		$	170,948		$	186,586
Common shares outstanding⁽³⁾		17,227,104			17,507,103			17,786,552			17,862,554			18,055,692			17,507,103			18,330,058
Book value per common share⁽⁴⁾	$	12.33		$	12.30		$	12.00		$	11.84		$	11.75		$	12.30		$	11.61
Tangible book value per common share⁽⁵⁾	$	9.76		$	9.76		$	9.55		$	9.39		$	10.31		$	9.76		$	10.18

(1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.
(2) Net interest margin-core and yield on loans - core excludes the impact of purchase accounting accretion, loan payoff charges and related deferred fees recognized related to early loan repayments.
(3) Excludes the dilutive effect of common stock issuable upon exercise of stock options.
(4) We calculate book value per common share as shareholders' equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
(5) We calculate the tangible book value per common share as total shareholders' equity less goodwill, preferred stock and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period.

Select Bancorp, Inc.
Selected Financial Information and Other Data
($ in thousands, except per share data)

	For the Quarter Ended															For the Year Ended

	March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
		2021			2020			2020			2020			2020			2020			2019			2018

Summary of Operations:
Total interest income	$	17,980			$	18,705		$	15,825		$	14,500		$	14,178		$	63,208		$	58,446		$	56,835
Total interest expense		2,049			2,681			2,714			2,646			2,718			10,759			11,556			9,450
Net interest income		15,931			16,024			13,111			11,854			11,460			52,449			46,890			47,385
Provision for (recovery of) loan losses		(777	)		400			1,638			1,933			2,273			6,244			438			(156	)
Net interest income after provision		16,708			15,624			11,473			9,921			9,187			46,205			46,452			47,541
Noninterest income		1,682			1,541			1,724			1,411			1,444			6,120			5,419			4,701
Merger/acquisition related expenses		-			-			7			709			39			755			406			1,826
Noninterest expense		10,196			12,131			10,060			9,793			9,208			41,192			34,734			32,724
Income before income taxes		8,194			5,034			3,130			830			1,384			10,378			16,731			17,692
Provision for income taxes		1,854			1,113			673			149			280			2,215			3,696			3,910
Net Income		6,340			3,921			2,457			681			1,104			8,163			13,035			13,782

Share and Per Share Data:
Earnings per share - basic	$	0.36		$	0.22		$	0.14		$	0.04		$	0.06		$	0.46		$	0.69		$	0.87
Earnings per share - diluted	$	0.36		$	0.22		$	0.14		$	0.04		$	0.06		$	0.45		$	0.68		$	0.87
Book value per share	$	12.33		$	12.30		$	12.00		$	11.84		$	11.75		$	12.30		$	11.61		$	10.85
Tangible book value per share⁽¹⁾	$	9.76		$	9.76		$	9.55		$	9.39		$	10.31		$	9.76		$	10.18		$	9.47
Ending shares outstanding		17,227,104			17,507,103			17,786,552			17,862,554			18,055,692			17,507,103			18,330,058			19,311,505
Weighted average shares outstanding:
Basic		17,386,715			17,637,540			17,847,913			18,013,863			18,255,351			17,937,596			19,016,808			15,812,585
Diluted		17,415,680			17,661,922			17,866,822			18,030,136			18,287,064			17,961,258			19,063,237			15,877,633

Selected Performance Ratios:
Return on average assets⁽²⁾		1.46	%		0.87	%		0.58	%		0.18	%		0.35	%		0.52	%		1.03	%		1.12	%
Return on average equity⁽²⁾		11.90	%		7.26	%		4.56	%		1.28	%		2.07	%		3.81	%		6.08	%		8.51	%
Net interest margin		4.02	%		4.10	%		3.73	%		3.45	%		4.03	%		3.79	%		4.04	%		4.19	%
Efficiency ratio ⁽³⁾		57.89	%		69.06	%		67.82	%		73.83	%		71.36	%		70.32	%		66.40	%		62.83	%

Period End Balance Sheet Data:
Gross loans	$	1,342,316		$	1,304,384		$	1,283,457		$	1,249,999		$	1,039,514		$	1,304,384		$	1,029,975		$	986,040
Total interest-earning assets		1,613,526			1,529,322			1,429,614			1,222,416			1,137,010			1,529,322			1,167,857			1,119,344
Goodwill		42,907			42,907			41,914			41,914			24,579			42,907			24,579			24,579
Core deposit intangible		1,363			1,513			1,677			1,856			1,431			1,513			1,610			2,085
Total assets		1,832,329			1,730,045			1,771,946			1,618,960			1,263,494			1,730,045			1,275,076			1,258,525
Deposits		1,582,637			1,485,817			1,472,780			1,338,753			982,651			1,485,817			992,838			980,427
Short-term debt		-			-			20,000			20,000			20,000			-			-			7,000
Long-term debt		12,372			12,372			37,372			37,372			37,372			12,372			57,372			57,372
Shareholders' equity		212,489			215,368			213,367			211,538			212,085			215,368			212,775			209,611

Selected Average Balances:
Gross Loans	$	1,322,031		$	1,288,138		$	1,255,027		$	1,193,985		$	1,020,630		$	1,189,894		$	1,004,051		$	987,634
Total interest-earning assets		1,613,963			1,561,104			1,403,106			1,321,172			1,147,631			1,386,187			1,164,149			1,119,344
Core Deposit Intangible		1,423			1,572			1,743			1,529			1,507			1,588			1,812			2,547
Total Assets		1,761,938			1,784,289			1,683,174			1,520,278			1,255,943			1,561,865			1,268,728			1,228,576
Deposits		1,516,612			1,499,162			1,399,840			1,237,343			972,162			1,278,068			981,132			989,838
Short-term debt		-			17,609			20,000			20,000			12,747			17,596			3,414			21,393
Long-term debt		12,372			34,383			37,438			37,438			44,625			38,440			57,372			49,357
Shareholders' equity		216,007			214,861			214,277			213,796			214,502			214,360			214,324			161,953

Asset Quality Ratios:
Nonperforming loans ⁽⁴⁾	$	13,167		$	14,296		$	13,739		$	14,399		$	12,820		$	14,296		$	12,148		$	11,635
Other real estate owned		1,968			2,172			3,237			3,561			3,737			2,172			3,533			1,088
Allowance for loan losses		13,187			14,108			13,561			12,054			10,586			14,108			8,324			8,669
Nonperforming loans ⁽⁴⁾ to period-end loans		0.98	%		1.10	%		1.07	%		1.15	%		1.23	%		1.10	%		1.18	%		1.18	%
Allowance for loan losses to period-end loans		0.98	%		1.08	%		1.06	%		0.96	%		1.02	%		1.08	%		0.81	%		0.88	%
Delinquency ratio ⁽⁵⁾		0.26	%		0.46	%		0.17	%		0.22	%		0.43	%		0.46	%		0.34	%		0.19	%
Net loan charge-offs (recoveries) to average loans ⁽²⁾		0.04	%		-0.05	%		0.04	%		0.16	%		0.00	%		0.04	%		0.08	%		0.00	%

(1) Tangible book value per share (a non GAAP measure) is equal to total shareholders' equity less goodwill and core deposit intangibles, divided by the number of outstanding shares of our common stock at the end of the relevant period. Please refer to the table above for a reconciliation of this non-GAAP measure.
(2) Annualized.
(3) Efficiency ratio is calculated as a non-interest expenses divided by the sum of net interest income and non-interest income.
(4) Nonperforming loans consist of non-accrural loans and accruing TDR loans.
(5) Delinquency Ratio includes loans 30-89 days past due and excludes non-accrual loans.

Mark A. Jeffries

Executive Vice President

Chief Financial Officer

Office: 910-892-7080 and Direct: 910-897-3603

markj@SelectBank.com

SelectBank.com